The expense of traditional sponsorships combined with the need to control its brand message have led New Belgium Brewing Co. to embrace and expand its proprietary bike and beer festival as the company increases its distribution area.

New Belgium, the privately owned microbrewer of quirky brands such as Fat Tire, Sunshine and Blue Paddle, produces the 11-stop Tour de Fat for a cost equal to its largest traditional sponsorship—an estimated mid-five-figure deal to be major sponsor and official beer of the Telluride Bluegrass Festival—said Meredith Giske, the company’s event marketing manager.

“Owning a property is a way for us to ensure that the consumer is getting the undiluted New Belgium experience,” Giske said. “Because we own it, we can shape it as a perfect way to communicate our message. It lets us talk intimately with people who are passionate about the causes we care about and our beer, and they relay that message to others. You can’t put a price on that kind of advertising. I am surprised that more companies don’t do this.”

Ensuring that its message is clearly communicated is of growing importance to the company as it expands. New Belgium produced its first TV spots this year and is expanding beyond its Rocky Mountain and Pacific Northwest base, but it doesn’t want its increasing popularity and availability to conflict with its homegrown, environmentally friendly, beer-that-cares positioning.

“We want there to be no question we’re the same people now that we were when we started the brand,” noted Giske. “We never want to be perceived as selling out by our core constituency.” The company currently sells its brews in 15 states; it entered Southern California late last year and plans to enter the Chicago market within the next year, she said.

New Belgium added four stops to the Tour de Fat this year, a strategy Giske said is more cost-effective than seeking sponsorship of independent properties in new markets, given that larger brewers can afford to outbid New Belgium for official beer rights at desirable properties. “We don’t have the budget for that,” she noted. “It’s more economical to produce additional TDF events.”

In addition to Telluride, New Belgium has existing relationships with properties whose positioning is “more amateur than professional and more playful than competitive,” according to Giske. They include Salida, Colo.’s New Belgium Brewing FIBArk Whitewater Festival; Lawrence, Kan.’s Wakarusa Music & Camping Festival; and Quincy, Calif.’s High Sierra Music Festival.

Event marketing has played a major role in the company’s success, Giske said. “Craft brew sales were up around seven percent last year, and NBB was up 17 percent. Most craft breweries don’t do much sponsorship, and most domestics aren't doing it in innovative ways. As a result, we see opportunity to continue to build the brand and hold onto future sales growth via original, creative events.”

Partnering With Nonprofits Keeps Costs Down
New Belgium has long championed bike riding for its positive impact on the environment. Environmental responsibility has been a hallmark of the company since its founding 14 years ago, including its use of wind power at its brewery and its commitment to recycling.

Thus when it developed the idea for a proprietary event, the company chose to focus on cycling and decided to make each stop a fundraiser for cycling-related nonprofits. That also allows New Belgium to rely on those groups to shoulder much of the on-site operations, rather than committing staff resources or hiring an outside agency or promoter to produce the events.

At TDF’s first iterations, even with volunteer help, Giske said the cost per attendee was relatively high, and the return on investment was less than hoped. “It takes a while to grow a grassroots event,” she said. “Authentic, original events are best built through buzz, and that can take a few seasons. You have to be patient.”

That patience is starting to pay dividends, Giske said, noting that media coverage and word of mouth is bringing larger crowds, up to 3,000 people, to each event.

But with growth come challenges, Giske said, noting that New Belgium does not want the events to become too large. Already, some of the TDF stops are close to outgrowing the ability of an all-volunteer operations team to manage them.

The company also can’t allow event growth to overwhelm the TDF’s core purpose of reinforcing New Belgium’s grassroots authenticity. For example, the events currently are run in an environmentally responsible way and the company maintains authority over what products vendors can offer on site.

“We try very hard not to be all things to all people,” said Giske. “Staying focused means saying no to other sponsors that want to get on board and media outlets that maybe don't fit; that can be hard.”

The challenge of event ownership is finding a balance between the tour’s original goal of outreach to nonprofits and the biking community, and leveraging it to promote New Belgium brands, Giske said. “As this thing has grown, our distributors and sales team are seeing more and more value in the program.”